SCHEME FOR PROMOTION OF MEDICAL DEVICE PARKS

BACKGROUND: The Medical Device industry is highly capital intensive with a long gestation period and requires development and induction of new technologies. It also requires continuous training of health providers to adapt to new technologies. Most of the hi-tech innovative products originate from a well-developed eco-system and innovation cycle which is yet to be fully developed in India. The industry depends on imports up to an extent of 86%.

The parks will get the required thrust under the “Promotion of Medical Device Parks“ scheme to provide common testing and laboratory facilities/centre at one place reducing the manufacturing cost significantly and create a robust ecosystem for medical device manufacturing in the country.

OBJECTIVE:

1. Creation of world class infrastructure facilities in order to make Indian medical device industry a global leader.

2. Easy access to standard testing and infrastructure facilities through creation of world class Common Infrastructure Facilities for increased competitiveness.

3. The scheme envisages significant reduction of the cost of production of medical devices leading to better availability and affordability of medical devices in the domestic market.

SALIENT FEATURES:

• • It is a central sector scheme.
  • Scope: Financial assistance under the Scheme will be provided for creation of common infrastructure facilities in four Medical Device Parks proposed by State Governments and selected under the scheme.
  • Financial Assistance:
    • Financial assistance (one-time grant-in-aid) to a selected Medical Device Park would be 70% of the project cost of common infrastructure facilities.
    • In case of North Eastern States and Hilly States (Himachal Pradesh, Uttarakhand, Union Territory of Jammu & Kashmir and Union Territory of Ladakh) financial assistance would be 90% of the project cost.
    • Maximum assistance under the scheme for one Medical Device Park would be limited to Rs. 100 crore.
  • Tenure of the Scheme: The tenure of the scheme is from Financial Year 2020-2021 to 2024-2025.
  • A Project Management Agency (PMA) will be nominated by Department of Pharmaceuticals (herein after referred as DoP) for providing secretarial, managerial and implementation support to DoP for effective implementation of the Scheme.
  • State Implementating Agency (SIA) set up by state government will be responsible for day-to-day management of Medical Device Parks.

SIGNIFICANCE:

• • 70% of high-end devices such as electronic equipment, advance surgical instruments, and diagnostic products are imported.
  • The domestic medical devices sector is expected to be worth USD 50 billion by 2030.
  • Currently 80% of our domestic sales constitute imported medical devices.

CHALLENGES:

• • Domestic manufacturing of medical devices is currently limited to low-end to moderate-end medical devices such as consumables, disposables, and implants.
    • low investment in research and development,
    • fewer tax concessions and inverted duty structure (higher tax on the raw material than on the finished good) for domestic manufacturers,
    • low capital investment,
    • lack of skilled manpower,
    • limited price and quality regulation,
    • fewer trained healthcare professionals.
  • The Parliamentary Standing Committee noted that GST on medical devices (12-18%) is high.  At the same time, the import duty on finished medical devices is lower than the import duty on raw materials or manufacturing components.
  • The Committee also noted that the number of central labs is inadequate,
  • Presently, Medical Device Rules, 2017 do not regulate second-hand medical devices rather these are regulated under environment rules. Thus, CDSCO does not maintain safety standards for such devices or evaluate their ill effects on public health.
  • It was highlighted by Standing Committee that of the Rs 120 crore allocated in the first phase (2022-23), only Rs 89 lakh has been spent so far.

WAY FORWARD

(Parliamentary Standing Committee recommendations):

• • There should be an inter-ministerial and inter-governmental strategy to offer domestic manufacturers competitive advantage.
  • There needs to be regular progress monitoring with state agencies along with expanding the scheme to other states.
  • Since the industry is at a nascent stage, government should provide support in the form of lower taxes rates.

• • The Department must list medium and high-end medical devices used for critical patient care as essential medicines to ensure price regulation.
  •  There must be at least one lab to be set up in proximity of each industry cluster.
  •  The safety, quality and efficacy of imported second-hand medical devices must be ensured through regulation.  It also suggested restricting such imports to protect domestic manufacturers.